The Top Fifth

[knapplc]

America has a uniquely ugly culture of, 'welp, obviously can't do anything about that really terrible thing that everyone else in the world seems able to do something about, so no sense in even trying!'

This is patently untrue.

[BigRedBuster]

 

 

 

 

 

 

 

 

 

 

 

 

Help me out here. I don't understand how everyone pushing back against my position doesn't seem to see that were talking about the upper tens of millions to billions of dollars and not the lower amounts. I'm quite literally saying, "Pass on that $40 million to your heirs without paying a dime in tax." It's only amounts above this that would be taxed.

 

If I made the limit $100 million before any tax is applied, does that change any minds or make any difference?

No....because there are some assets that can't be broken up without huge disruptions to even people outside of the heirs.

 

Let's say I live in central Nebraska and own a business that I have worked all my life to build and now, on paper, it is worth $150,000,000. I employ 200 people in a small town and it's located here simply because this is where I lived when I started it. The community benefits from my business by being one of the largest employers in the area and the taxes we pay. Now, let's say I die and you want to now tax my heirs on anything north of $40,000,000. That means I'm going to pay huge taxes on $110,000,000. There are one hell of a lot of businesses that can not afford that type of hit.

 

Look at my example of my own families business in the 70s. Ours wasn't anywhere close to the figures I'm using here. But, at that time, the estate taxes were such that it caused HUGE problems.

 

So....for my family, in my example, can't just sell off 20-30-50% of their manufacturing plant. So, chances are the entire company is going to be sold off. Now.....either it's going to be liquidated and 200 people lose their jobs or a big corporation is going to come in and buy it up and probably move the plant to somewhere else because they aren't committed to the community as we are by living here.

 

Where is the win in this?

 

These aren't made up scenarios. I know people who have gone through these exact situations.

 

And, if you increase the amount to 100,000,000...all that does is decrease the number of people who are affected by that. But....I'm sorry but the number affected doesn't seem like a logical fact to use to see if something is right to do or not.

 

The business/heirs could take out a loan. Or have a gradual pay out to the IRS. Or sell off parts as you mentioned. Or you could have been gradually selling the business to your heirs over time.

 

But why does the business in this case have to be inherited? That business can go public, in which case the investors own the company and the money of that sale would then be taxed before going to the heirs. Or it could be sold to a large corporation, as you said. Or it could be sold to the employees as a worker cooperative.

 

What in God's name gives the state the right to force these kinds of changes? And....this entire discussion started by a problem with wealth distribution. Forcing a company to go public would force the company into Wallstreet where there are stock owners that don't give a flying rip about a small town in Nebraska where it is located. Where is the logic of wealth distribution there?

 

I gave you a whole bunch of options and I'm sure there are more. And becoming incorporated doesn't suddenly teleport the business to Wall Street.

Please explain how being Incorporated is associated with your ideas.

 

I'm not sure how it's at odds with what I've said. I'm fine with businesses being incorporated.

 

You're the one that brought up the term. I'm trying to figure out what you meant when you used it.

 

Do you think all corporations are contributing to wealth inequality? I don't. Nor do I think wealth inequality is inherently bad. It's the effects that wealth inequality is currently having on our society that I'm concerned about. And if there's a more effective tool to improve things than estate taxes, I'd be in favor of those tools instead.

 

You suggested that the company should be forced to go public. When I questioned that idea, you said..."becoming incorporated doesn't automatically teleport the business to Wall Street".

 

I'm trying to figure out how the term "incorporated" had anything to do with my post.

 

I didn't suggestion they "had" to go public. I gave a bunch of options of which that was one.

 

Yes...you suggested that that is one of the options they should be forced to consider. I questioned that idea and you came back with "becoming incorporated doesn't automatically teleport the business to Wall Street". I'm trying to figure out this statement.

 

Oh, I see. Sorry I meant "going public" not "becoming incorporated".

 

How does a company "go public" without Wall Street involved?

[BigRedBuster]

 

And...I want to point out that you seem to be back peddling some. Here is one of your first statements on the subject.

 

As for post #31, yes, we should break the chain of inherited wealth, whether that's a rancher or a banker should make no difference. Why should someone get millions or billions of dollars having done nothing to earn it?

 

As for my solution, it would be to allow small (relatively speaking) transfers of wealth but just prevent the gigantic transfers of wealth, which is similar to the estate tax today. I'd select a limit case - say $10 million/person - that a person could pass on to anyone they wanted (not just their kids), and then tax the rest at 90%. In this case, your ranchers could pass up to $20 million (for a couple) worth of the ranch without taxes. I'd even go so far as to agree to a higher limit like $50 million/person if the associated tax was also higher like 99%.

 

 

This statement isn't about collecting enough taxes to pay for infrastructure or governmental services. It is specifically about how wrong you think it is that people are able to pass millions of dollars onto heirs and how that should be broken up and given to the state. Not to sound hyperbolic. But....that right there is a thought process that is anti-American.

 

So....you are going to arbitrarily come up with a figure that YOU think is just unfair that pass onto heirs. Anything above that is going to be broken up and distributed because YOU think YOU have the right to it.

 

Sorry....count me out of that no line of thought no matter what the dollar figure is.

It's not at all anti-American. If read the articles I posted above, you'd see that estate taxes were heavily favored by Teddy Roosevelt (a Republican btw). And how does this differ from paying taxes on income or sales? Are those anti-American too?

 

Again, I gave a number of options. Don't like breaking it up, use a different approach.

 

I'm all in favor of a less arbitrary figure. What do you suggestion?

 

I have no problem with taxes as they are necessary for our country to operate it's government. The type and level of taxes are all debatable.

 

My biggest issue with what you have said is from your first statements where your reasoning behind your estate taxes wasn't to raise money for the government to work. It was to break up wealth because you think the government has more right to their wealth than the heirs do. THAT is just patently wrong.

 

As for tax solutions? As I have said, I understand taxes are necessary and everyone should be paying their share. But, I am completely against taxes that openly and purposely force the break up of assets for the purpose of wealth redistribution.

 

As for a solution to collecting money to run the government, off the top of my head I would suggest that we tax income from the assets and capital gains if and when the assets are sold. I would need to be creative on how the capital gains is calculated. So, going back to the ranch in the Sandhills, the heirs would not be hit with a huge tax bill when the parents die just based on a paper value of the assets. They would be taxed on income from the ranch as long as they own it and they would be taxed on the proceeds if the ranch was sold. Also, if people inherit liquid assets like cash, that would be taxed the same way as income is taxed. They obviously would be responsible for all property taxes as usual.

[BigRedBuster]

But, if we truly want to claim the mantle of the greatest country on Earth, we cannot just give up trying, regardless of what the natural state of the world is.

 

I have to believe that as long as the United States is around, we will have people here who fight for betterment of their fellow human beings.

Wait....who is "giving up trying" to make this all a better place to live? Just because we disagree with that that is and the solution to get there, doesn't mean anyone has "given up".

[Danny Bateman]

 

America has a uniquely ugly culture of, 'welp, obviously can't do anything about that really terrible thing that everyone else in the world seems able to do something about, so no sense in even trying!'

This is patently untrue.

 

 

It's quickly becoming true under Trump. Healthcare, climate change, civil freedoms, voter rights...

 

There's at the very least a complete discord and inability to agree upon the problems.

[zoogs]

My biggest issue with what you have said is from your first statements where your reasoning behind your estate taxes wasn't to raise money for the government to work. It was to break up wealth

I agree with this.

 

off the top of my head I would suggest that we tax income from the assets and capital gains if and when the assets are sold

The tip-top of estates will consist of "unrealized" capital gains. If the assets are never considered realized, then these gains will go untaxed in perpetuity.

[Danny Bateman]

 

But, if we truly want to claim the mantle of the greatest country on Earth, we cannot just give up trying, regardless of what the natural state of the world is.

 

I have to believe that as long as the United States is around, we will have people here who fight for betterment of their fellow human beings.

Wait....who is "giving up trying" to make this all a better place to live? Just because we disagree with that that is and the solution to get there, doesn't mean anyone has "given up".

 

 

No one has given up trying, other than those who would simply feed the poor into the thresher to save the money.

 

As long as there are people like us who would stand against that, that group won't win.

[BigRedBuster]

 

 

America has a uniquely ugly culture of, 'welp, obviously can't do anything about that really terrible thing that everyone else in the world seems able to do something about, so no sense in even trying!'

This is patently untrue.

 

 

It's quickly becoming true under Trump. Healthcare, climate change, civil freedoms, voter rights...

 

There's at the very least a complete discord and inability to agree upon the problems.

 

In the famous words of Trump.....WRONG!!!!!

 

LOMS made a comment that this is part of our culture and what America is. That is flat out wrong. We have a very very very long history of fighting for what is right in the world and fighting to improve life not just here but around the world. Do we have people within our country who don't want to do that or think we don't need to do that? Sure, that has been true since the beginning of time and always will be. BUT, that is not America's "culture".

[knapplc]

I was mostly calling untrue the assertion that America has a "uniquely ugly culture."

 

America's ugliness is neither unique nor historic. It is not remotely the worst in the world at the moment, let alone history.

[BigRedBuster]

 

My biggest issue with what you have said is from your first statements where your reasoning behind your estate taxes wasn't to raise money for the government to work. It was to break up wealth

I agree with this.

 

off the top of my head I would suggest that we tax income from the assets and capital gains if and when the assets are sold

The tip-top of estates will consist of "unrealized" capital gains. If the assets are never considered realized, then these gains will go untaxed in perpetuity.

 

If an asset is not sold, there is no capital gains realized or unrealized.

 

Let's say I inherit a section of land in the Platte Valley. Right now that is probably worth around $4,480,000. I have a choice of either selling that or maintaining it and receiving income off of it. So, If I keep ownership, I should be taxed on the income I receive off of that land. If I sell it, I should then be taxed a reasonable capital gains tax. If I then die 5 years from now and pass that on to my kids, they then have the opportunity to sell it and create the taxable event or receive income off of it which is taxable.

 

If assets are privately owned, eventually they will be sold. It may be generations down the road, but nothing lasts forever.

 

At one time (may still be the case) the two largest land owners in Nebraska was Ted Turner and the Mormon Church. Now, I have way more of a problem with the Mormon Church ownership than I do Ted Turner because at some point, he will die and his assets will probably be liquidated. If they aren't they will be eventually when his heirs start dying off. The Mormon Church is the one that will own the land into perpetuity. But, it's their right to own the land, I just hope the tax laws are such that the church (in this case) is taxed just like a normal investor instead of some type of loop hole for churches. I think that's the case but I have never been able to find out.

[zoogs]

If an asset is not sold, there is no capital gains realized or unrealized.

There's no assessed capital gains tax. So long as the assets appreciate, those are capital gains, no? And those gains are not taxed as long as they aren't "realized", e.g., through a sale.

 

Thus if you buy $100k of stock which appreciates to $100M by the time you die, you can then pass this on to your heirs with the gains having never been taxed. If I'm understanding correctly.

 

Unrealized capital gains range "from 32 percent for estates worth between $5 million and $10 million to as much as about 55 percent of the value of estates worth more than $100 million.¹⁴."

 

This is one of the reasons for the estate tax. From a Dept. of Treasury researcher: "...these taxes act as a backstop to the income tax, reducing the erosion of its base. Much of the capital income that escapes the income tax passes through the estate tax." (http://www.urban.org/sites/default/files/alfresco/publication-pdfs/1000526-Estate-and-Gift-Tax-Federal.PDF)

[RedDenver]

 

 

 

 

 

 

 

 

 

 

 

 

 

Help me out here. I don't understand how everyone pushing back against my position doesn't seem to see that were talking about the upper tens of millions to billions of dollars and not the lower amounts. I'm quite literally saying, "Pass on that $40 million to your heirs without paying a dime in tax." It's only amounts above this that would be taxed.

 

If I made the limit $100 million before any tax is applied, does that change any minds or make any difference?

No....because there are some assets that can't be broken up without huge disruptions to even people outside of the heirs.

 

Let's say I live in central Nebraska and own a business that I have worked all my life to build and now, on paper, it is worth $150,000,000. I employ 200 people in a small town and it's located here simply because this is where I lived when I started it. The community benefits from my business by being one of the largest employers in the area and the taxes we pay. Now, let's say I die and you want to now tax my heirs on anything north of $40,000,000. That means I'm going to pay huge taxes on $110,000,000. There are one hell of a lot of businesses that can not afford that type of hit.

 

Look at my example of my own families business in the 70s. Ours wasn't anywhere close to the figures I'm using here. But, at that time, the estate taxes were such that it caused HUGE problems.

 

So....for my family, in my example, can't just sell off 20-30-50% of their manufacturing plant. So, chances are the entire company is going to be sold off. Now.....either it's going to be liquidated and 200 people lose their jobs or a big corporation is going to come in and buy it up and probably move the plant to somewhere else because they aren't committed to the community as we are by living here.

 

Where is the win in this?

 

These aren't made up scenarios. I know people who have gone through these exact situations.

 

And, if you increase the amount to 100,000,000...all that does is decrease the number of people who are affected by that. But....I'm sorry but the number affected doesn't seem like a logical fact to use to see if something is right to do or not.

 

The business/heirs could take out a loan. Or have a gradual pay out to the IRS. Or sell off parts as you mentioned. Or you could have been gradually selling the business to your heirs over time.

 

But why does the business in this case have to be inherited? That business can go public, in which case the investors own the company and the money of that sale would then be taxed before going to the heirs. Or it could be sold to a large corporation, as you said. Or it could be sold to the employees as a worker cooperative.

 

What in God's name gives the state the right to force these kinds of changes? And....this entire discussion started by a problem with wealth distribution. Forcing a company to go public would force the company into Wallstreet where there are stock owners that don't give a flying rip about a small town in Nebraska where it is located. Where is the logic of wealth distribution there?

 

I gave you a whole bunch of options and I'm sure there are more. And becoming incorporated doesn't suddenly teleport the business to Wall Street.

Please explain how being Incorporated is associated with your ideas.

 

I'm not sure how it's at odds with what I've said. I'm fine with businesses being incorporated.

 

You're the one that brought up the term. I'm trying to figure out what you meant when you used it.

 

Do you think all corporations are contributing to wealth inequality? I don't. Nor do I think wealth inequality is inherently bad. It's the effects that wealth inequality is currently having on our society that I'm concerned about. And if there's a more effective tool to improve things than estate taxes, I'd be in favor of those tools instead.

 

You suggested that the company should be forced to go public. When I questioned that idea, you said..."becoming incorporated doesn't automatically teleport the business to Wall Street".

 

I'm trying to figure out how the term "incorporated" had anything to do with my post.

 

I didn't suggestion they "had" to go public. I gave a bunch of options of which that was one.

 

Yes...you suggested that that is one of the options they should be forced to consider. I questioned that idea and you came back with "becoming incorporated doesn't automatically teleport the business to Wall Street". I'm trying to figure out this statement.

 

Oh, I see. Sorry I meant "going public" not "becoming incorporated".

 

How does a company "go public" without Wall Street involved?

 

You have an initial public offering (IPO) where members of the public can buy your shares for the first time. Those members of the public may or may not be on Wall Street, but given the large number of institutional investors on Wall Street, it's very likely there will at least be some. The company maintains it's current locations, headquarters, etc. I'm not sure what else to say here as I'm not an expert on IPO's, what's your question/concern?

[BigRedBuster]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Help me out here. I don't understand how everyone pushing back against my position doesn't seem to see that were talking about the upper tens of millions to billions of dollars and not the lower amounts. I'm quite literally saying, "Pass on that $40 million to your heirs without paying a dime in tax." It's only amounts above this that would be taxed.

 

If I made the limit $100 million before any tax is applied, does that change any minds or make any difference?

No....because there are some assets that can't be broken up without huge disruptions to even people outside of the heirs.

 

Let's say I live in central Nebraska and own a business that I have worked all my life to build and now, on paper, it is worth $150,000,000. I employ 200 people in a small town and it's located here simply because this is where I lived when I started it. The community benefits from my business by being one of the largest employers in the area and the taxes we pay. Now, let's say I die and you want to now tax my heirs on anything north of $40,000,000. That means I'm going to pay huge taxes on $110,000,000. There are one hell of a lot of businesses that can not afford that type of hit.

 

Look at my example of my own families business in the 70s. Ours wasn't anywhere close to the figures I'm using here. But, at that time, the estate taxes were such that it caused HUGE problems.

 

So....for my family, in my example, can't just sell off 20-30-50% of their manufacturing plant. So, chances are the entire company is going to be sold off. Now.....either it's going to be liquidated and 200 people lose their jobs or a big corporation is going to come in and buy it up and probably move the plant to somewhere else because they aren't committed to the community as we are by living here.

 

Where is the win in this?

 

These aren't made up scenarios. I know people who have gone through these exact situations.

 

And, if you increase the amount to 100,000,000...all that does is decrease the number of people who are affected by that. But....I'm sorry but the number affected doesn't seem like a logical fact to use to see if something is right to do or not.

 

The business/heirs could take out a loan. Or have a gradual pay out to the IRS. Or sell off parts as you mentioned. Or you could have been gradually selling the business to your heirs over time.

 

But why does the business in this case have to be inherited? That business can go public, in which case the investors own the company and the money of that sale would then be taxed before going to the heirs. Or it could be sold to a large corporation, as you said. Or it could be sold to the employees as a worker cooperative.

 

What in God's name gives the state the right to force these kinds of changes? And....this entire discussion started by a problem with wealth distribution. Forcing a company to go public would force the company into Wallstreet where there are stock owners that don't give a flying rip about a small town in Nebraska where it is located. Where is the logic of wealth distribution there?

 

I gave you a whole bunch of options and I'm sure there are more. And becoming incorporated doesn't suddenly teleport the business to Wall Street.

Please explain how being Incorporated is associated with your ideas.

 

I'm not sure how it's at odds with what I've said. I'm fine with businesses being incorporated.

 

You're the one that brought up the term. I'm trying to figure out what you meant when you used it.

 

Do you think all corporations are contributing to wealth inequality? I don't. Nor do I think wealth inequality is inherently bad. It's the effects that wealth inequality is currently having on our society that I'm concerned about. And if there's a more effective tool to improve things than estate taxes, I'd be in favor of those tools instead.

 

You suggested that the company should be forced to go public. When I questioned that idea, you said..."becoming incorporated doesn't automatically teleport the business to Wall Street".

 

I'm trying to figure out how the term "incorporated" had anything to do with my post.

 

I didn't suggestion they "had" to go public. I gave a bunch of options of which that was one.

 

Yes...you suggested that that is one of the options they should be forced to consider. I questioned that idea and you came back with "becoming incorporated doesn't automatically teleport the business to Wall Street". I'm trying to figure out this statement.

 

Oh, I see. Sorry I meant "going public" not "becoming incorporated".

 

How does a company "go public" without Wall Street involved?

 

You have an initial public offering (IPO) where members of the public can buy your shares for the first time. Those members of the public may or may not be on Wall Street, but given the large number of institutional investors on Wall Street, it's very likely there will at least be some. The company maintains it's current locations, headquarters, etc. I'm not sure what else to say here as I'm not an expert on IPO's, what's your question/concern?

 

You do realize that to do that, you have to be on an exchange like the NYSE or Nasdaq right which are all........in NYC? And....you also have to go through a brokerage firm which will be one of the large banks that works on Wall Street. You also have to abide by a huge number of regulations that all are managed and regulated by Wall Street firms. You do understand that....right?

[BigRedBuster]

 

If an asset is not sold, there is no capital gains realized or unrealized.

There's no assessed capital gains tax. So long as the assets appreciate, those are capital gains, no? And those gains are not taxed as long as they aren't "realized", e.g., through a sale.

 

Thus if you buy $100k of stock which appreciates to $100M by the time you die, you can then pass this on to your heirs with the gains having never been taxed. If I'm understanding correctly.

 

Unrealized capital gains range "from 32 percent for estates worth between $5 million and $10 million to as much as about 55 percent of the value of estates worth more than $100 million.%5B14%5D."

 

No. That is asset appreciation. Not Capital Gains.

 

Think of capital as cash. You buy an asset with 1,000,000 cash. So your basis for the asset is 1,000,000. Now, let's say you own that asset for 5 years and sell it for 10,000,000. Now you have 10,000,000 in capital (cash). So, your capital gains is 9,000,000. You had NO capital gains until the asset is sold.

[RedDenver]

 

 

My biggest issue with what you have said is from your first statements where your reasoning behind your estate taxes wasn't to raise money for the government to work. It was to break up wealth

I agree with this.

 

off the top of my head I would suggest that we tax income from the assets and capital gains if and when the assets are sold

The tip-top of estates will consist of "unrealized" capital gains. If the assets are never considered realized, then these gains will go untaxed in perpetuity.

 

If an asset is not sold, there is no capital gains realized or unrealized.

 

Let's say I inherit a section of land in the Platte Valley. Right now that is probably worth around $4,480,000. I have a choice of either selling that or maintaining it and receiving income off of it. So, If I keep ownership, I should be taxed on the income I receive off of that land. If I sell it, I should then be taxed a reasonable capital gains tax. If I then die 5 years from now and pass that on to my kids, they then have the opportunity to sell it and create the taxable event or receive income off of it which is taxable.

 

If assets are privately owned, eventually they will be sold. It may be generations down the road, but nothing lasts forever.

 

At one time (may still be the case) the two largest land owners in Nebraska was Ted Turner and the Mormon Church. Now, I have way more of a problem with the Mormon Church ownership than I do Ted Turner because at some point, he will die and his assets will probably be liquidated. If they aren't they will be eventually when his heirs start dying off. The Mormon Church is the one that will own the land into perpetuity. But, it's their right to own the land, I just hope the tax laws are such that the church (in this case) is taxed just like a normal investor instead of some type of loop hole for churches. I think that's the case but I have never been able to find out.

 

In your Ted Turner and heirs vs the Mormon Church as land owners, how are they any different if Ted' heirs never sell? Because even when Ted's heirs start dying off, they can hand over the assets to their heirs, and so on with each generations. You see that they're similar problems, right?